The sale of Vattenfall’s Swedish district heating assets has narrowed to a two-horse race, with Igneo Infrastructure Partners and CVC DIF vying for the business, two sources familiar with the process said.

The infrastructure investors are the remaining contenders in the process after recent exits by Vauban Infrastructure Partners-Interogo and Patrizia-Nordic Infrastructure AG (NIAG) teams as well as JP Morgan’s Adven, the sources said.

Infralogic reported earlier this month that a round of “2A” bids were due on 13 October to further whittle down the bidding field for a 2B process.

Vattenfall is looking to reach an agreement on the sale by Christmas at the latest, said one of the sources.

Another said that an enterprise value in the region of 20x-25x EBITDA is being discussed for the business. Based on expected EBITDA of some SEK 900m (EUR 83m) in 2026, this could value the business in excess of EUR 2bn.

Vattenfall, which is working with Danske Bank on the auction, has district heating operations at around 11 locations including Uppsala, Nykoping and south Stockholm, according to its website.

Vattenfall in March last year announced a strategic review of its district heating operations in the UK, Sweden, and Netherlands, as well as of its UK electricity distribution business.

Aside from Danske Bank as financial advisor on the sale, SEB is advising Vattenfall on debt matters related to the sale and has been carrying out lender education during the process, said one of the sources.

The two remaining bidders in the process are established players in the Nordic district heating sector, Igneo through its energy infrastructure business Nordion Energi and CVC DIF through its stake in Finnish district heating company Loimua.

The end stages of the Vattenfall process come amid growing M&A activity in the Nordics heating market. NIAG, a Swiss holding company, and co-investor Polhem Infra are gearing up to sell Solör Bioenergi in Sweden, while CVC DIF and its co-shareholders are planning to sell Loimua in Finland.

Vattenfall, Igneo, CVC DIF, Patrizia and Vauban declined to comment. NIAG, Interogo, Adven and JP Morgan did not respond to requests for comment.